What Will the Hawaii DOE Do With the $775K New Hope Settlement?

The international megachurch that oversees New Hope has agreed to fork over $775,000 to settle a lawsuit claiming it shortchanged the state when it rented public school facilities on Oahu.

But as of now it’s unclear exactly where the money will go.

The plaintiffs in the case — local activists and realtors Mitch Kahle and Holly Huber — have received as much as one-fourth of the settlement, or between $116,000 and $194,000, in accordance with a state statute regulating lawsuits in which private citizens sue on behalf of a government entity.

Huber said she and Kahle are prohibited from talking about the settlement, including what their share of the money is and what they will do with it, as part of a binding agreement with New Hope’s umbrella organization, the International Church of the Foursquare Gospel.

The Hawaii Department of Education will ultimately receive the rest of the money, but spokeswoman Donalyn Dela Cruz said the DOE doesn’t yet have details on how it will spend its share of the settlement, which amounts to at least $581,000. She said it would be “a while” before she gets further information.

The settlement was agreed upon by the state, Foursquare Gospel and Kahle and Huber and only filed in Circuit Court on Tuesday. Anne Lopez of the Attorney General’s office said the settlement’s conditions are favorable for the DOE in that the money is earmarked “for the benefit of the public schools” and isn’t going to the state’s general fund, which is typically the case in such agreements. Foursquare Gospel had to pay the settlement to the state no later than Jan. 31, according to the agreement.

In resolving the lawsuit, Foursquare Gospel — which was not named in the original complaint, although it faced a separate claim from Kahle and Huber — “admitted no under payment or wrongdoing,” the settlement says.

In a statement included in the settlement, an unnamed spokesman for Foursquare Gospel said that “helping schools is a better use of church funds than fighting law suits.”

The agreement resolves some of the claims included in a high-profile lawsuit filed under seal last March alleging five churches, including three New Hope churches affiliated with Foursquare Gospel, had over the previous six years deprived the state of $5.6 million in unpaid rent and fees. (The complaint is posted below.) A judge dismissed the case in December, citing insufficient detail.

In that case, the churches were accused of filling out rental agreement forms that under-reported how much time they actually spent on campus using various facilities and utilities for religious services and other events on weekends and holidays. The complaint included dozens of pages of documentation — including social media posts, photos and internal DOE emails — that Kahle and Huber said proved the churches were using school grounds for far longer than they stated in their rental agreements.

New Hope allegedly accounted for nearly $4.6 million of the underpayments, including $3.1 million for New Hope Oahu’s use of Farrington High School, according to the original complaint.

John Tilton, New Hope Oahu’s executive pastor and finance director, said he wasn’t involved in the litigation and declined to comment on the settlement.

Fernando Castillo, a spokesman for Foursquare Gospel’s local branch, didn’t respond to a request for comment Thursday.

Huber said she and Kahle will file an amended lawsuit against the remaining two churches: One Love Ministries, which rents space at Kaimuki High School, and Calvary Chapel Oahu, which uses Mililani High School. They allege that the two churches underpayments amount to about $1.1 million.

Huber said she and Kahle “still have a lot to cover,” pointing to the more than 100 additional churches that she said are operating in schools and potentially shortchanging the state.

She also stressed that the DOE is partially to blame for possible underpayments, explaining that the department has over the years failed to increase the fees it charges for utilities even though administrative rules require that they be revised every other year to match changes in electricity and other costs.

Dela Cruz did not answer questions in follow-up emails asking whether the department had complied with the rules, but she did direct Civil Beat to a webpage with information on the use of school facilities. That page contains a link to the DOE’s fee schedule, which appears to have been updated in March 2013 and shows, for example, that the DOE charges $26.38 per hour for utility use of a large auditorium at an Oahu school.

But Kahle and Huber’s original lawsuit includes a fee schedule from July 2008 listing the exact same rates. (That fee schedule, which was appended to the original complaint, is attached below.)

Huber said she hopes the DOE will better enforce policies governing the use of its facilities, which are outlined in Chapter 39 of the department’s administrative rules.

But Dela Cruz said the lawsuit hasn’t had any effect on the DOE’s regulation of school facility rental agreements.

Don Horner, Board of Education chairman, declined to comment on the settlement, noting that the board was not a party to the case.

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